Long term Capital Gain on Transfer of Residential Property if Net Consideration is Invested in the Equity Shares of an Eligible company [Section 54GB] [w.e.f. A.Y. 2013- 14 but upto A.Y. 201 7-1 8]

Long term Capital Gain on Transfer of Residential Property if Net Consideration is Invested in the Equity Shares of an Eligible company [Section 54GB] [w.e.f. A.Y. 2013- 14 but upto A.Y. 201 7-1 8]

 

(i)        Eligible assessee. An individual or HUF

(ii)       Conditions

(a)        he residential property must be a house or plot of land;

(b)       Such residential property must be a long term capital asset;

(c)        Such residential property must have been transferred on or after 1-4-20 12 but on or before 31-3-2017;

(d)       There must be long term capital gain on such transfer;

(e)        The assessee (Individual or HUF) utilises the net consideration of residential property in the equity shares of an eligible company before the due date of furnishing of return of income u/s 139(1);

(f)        The eligible company is to utilise the amount for purchase of new asset within one ‘ear from the date of subscription in equity shares by the assessee;

(g)       The amount of net consideration, which has been received by the company for issue of shares to the assessee, to the extent it is not utilised by the company for the purchase of the new asset before the due date of furnishing of the return of income by the assessee u/s 139 (1), shall be deposited by the company, before the said due date in an account in any such bank or institution as may be specified shall be utilised in accordance with any scheme which the Central Government may, by notification in the official Gazette, frame in this behalf and the return furnished by the assessee shall be accompanied by proof of such deposit having been made.

(iii)     Amount of exemption

1.  If net consideration > cost of new asset, then

(b) If net consideration < cost of new asset, then

Amount of exemption = whole amount of LTCG (i.e. 100%)

(iv)      Forfeiture of exemption

(a)       If the assessee (Individual/HUF) sells or otherwise transfers the equity shares of the eligible company within 5 years from the date of acquisition.

In such a case, the old exempted capital gain u/s 54GB shall be deemed to be the long term capital gain of the previous year in which such shares are sold or other wise transferred.

(b)       If the eligible company sells or otherwise transfers the new asset within 5 years from the date of acquisition.

 In such a case, the old exempted capital gain u/s 54 GB shall be deemed to be the long term capital gain of the previous year in which such new asset is sold or otherwise transferred.

(c)       If the amount deposited in specWed bank/Institution is not utilised fully or partly by the eligible company for purchasing the new asset within one year from the date of subscription in shares by the assessee.

In such a case, capital gain proportionate to unutilised amount shall be deemed to be the long term capital gain of the previous year in which the period of one year from the date of subscription in shares by the assessee expires and the company shall be entitled to withdraw such amount in accordance with the scheme.